Tag Archives: PFRS

Overtime Limits for Tier 5 and 6 Members

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Tier 5 and 6 members are subject to limits on the amount of overtime that can be included in their pension. You can earn overtime pay beyond the overtime limit, but it won’t be factored into your pension calculation. And you don’t pay member contributions on overtime pay that is above the limit.

Overtime Limits for Tier 5 and 6 Members

Tier 5 Overtime Limits

The overtime limit for Tier 5 Employees’ Retirement System (ERS) members increases each calendar year by 3 percent. In 2024, the limit for Tier 5 ERS members is $22,688.85.

For Tier 5 Police and Fire Retirement System (PFRS) members, the overtime limit is 15 percent of your regular earnings each calendar year.

For more information, visit our Overtime Limits for Tier 5 page.

Tier 6 Overtime Limits

The overtime limit for Tier 6 ERS members increases each calendar year based on the annual increase of the Consumer Price Index (CPI). In 2024, the limit for Tier 6 ERS members is $20,459.

For Tier 6 PFRS members, the overtime limit is 15 percent of your regular earnings each calendar year.

For more information, visit our Overtime and Earnings Limits for Tier 6 page.

Your Pension Benefit Calculation

Your NYSLRS pension will be based on your service credit and final average earnings (FAE). Your FAE is the average annual earnings you receive during the period when your earnings are highest (36 consecutive months for Tier 5 and 60 consecutive months for Tier 6). Your FAE will include overtime pay you earned up to each annual limit.

Your FAE may be limited in other ways. For example, for most members, if your earnings increase significantly in the years used for your FAE, some of those earnings might not count toward your pension. The specific limits depend on your tier. Visit our Final Average Earnings page for more information about this limit.

For Tier 6 members, the earnings that can be used toward your pension are also limited to the Governor’s salary.

Read Your Plan Publication

Your retirement plan publication provides specific information about the earnings that will be used to calculate your pension. Visit our website to Find Your NYSLRS Retirement Plan Publication.

Estimate Your Pension in Retirement Online

Most members can create their own pension estimate in minutes using Retirement Online. You can enter different retirement dates to see how those choices would affect your benefit. Sign in to Retirement Online and click the “Estimate my Pension Benefit” button to try it.

Applying for a NYSLRS Loan in Retirement Online

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Planning on taking out a NYSLRS loan? Applying through Retirement Online is fast and convenient.

Eligibility for a NYSLRS loan is based on your tier. Generally, you’ll need to be on the payroll of a participating employer, have at least one year of service and have sufficient contributions in your account. (Note: Retirees are not eligible for NYSLRS loans.)

Applying for a NYSLRS Loan in Retirement Online

Retirement Online is the Fastest Way to Apply

When you use Retirement Online, NYSLRS receives your application immediately and can process your loan more quickly. It’s also an easy way to check the amount you are eligible to borrow, your balance on any outstanding loans, and more.

To apply:

As you work your way through the online application, you’ll see:

  • How much you are eligible to borrow;
  • The minimum repayment amount;
  • The expected payoff date; and
  • How much you can borrow without tax implications.

If you apply for a loan and you already have an existing loan (or loans), you’ll choose one of two options:

  1. Multiple loans: With multiple loans, you are taking a new loan, and each of your outstanding loans has a separate five-year due date and minimum payment. The minimum payments for each of your loans are added together for one total minimum payment. This combined minimum payment amount is higher than the minimum would be if you choose a refinanced loan, but with multiple loans, as each loan is paid off, your total minimum payment goes down.
  2. Refinance your existing loan: Refinancing your loan adds your new loan amount to your existing balance and consolidates the entire amount as one loan instead of taking separate loans. Minimum payment amounts for refinanced loans are lower than the minimum for multiple loans because when you refinance, we combine your existing loan balance with your new loan and spread out the repayment over a new five-year term. However, this increases the portion of your loan that may be considered a taxable distribution, and federal withholding can significantly reduce the loan amount that you receive.

There is a service charge of $45 that will be deducted from your loan check when it is issued. The current interest rate is 5 percent. The interest rate will remain fixed for the term of your loan.

NYSLRS loans are exempt from New York State and local income taxes. But the Internal Revenue Service (IRS) may consider all or part of a NYSLRS loan taxable – for instance, if you borrow above certain limits. The Retirement Online loan application will show you the maximum amount you can borrow without tax implications.

When Will I Receive My Loan Check?

Loan checks are mailed out from NYSLRS once a week. To check the status of your loan application:

You will also receive a confirmation letter when your loan case has been completed. You can find it in your Retirement Online account under “View Documents.”

Repaying Your NYSLRS Loan

Loan payments are deducted from your paycheck. If you choose to repay the minimum amount, your payroll deduction may be increased periodically to ensure your loan will be repaid within the required five-year repayment term. You can increase your payroll deduction amount, make additional payments or pay your loan in full at any time with no prepayment penalties. Retirement Online is the easiest way to manage your loan payments. Sign in to your account and select “Manage my Loans.”

Retiring With an Outstanding NYSLRS Loan

If you retire with an outstanding loan, your pension will be reduced. You will also need to report at least a portion of the loan balance as ordinary income (subject to federal income tax) to the IRS. If you retire before age 59½, the IRS may charge an additional 10 percent penalty. If you are nearing retirement, be sure to check your loan balance. If you are not on track to repay your loan before you retire, you can increase your loan payments, make additional lump sum payments or both in Retirement Online.

Note: Employees’ Retirement System (ERS) members may repay their loan after retiring, but they must pay the full amount (that is, the amount that was due on their retirement date) in a single lump-sum payment. Once you do, your pension benefit will increase from that point on, but it will not be adjusted retroactively back to your date of retirement.

Visit Our Website for More Information

For more information about NYSLRS loans, including what happens if you go off payroll or default on your loan, visit our Loans page. Need help with Retirement Online? See our Tools and Tips blog post.

How Your Tier 6 Contribution Rate Can Change

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Most NYSLRS members contribute a percentage of their earnings to help fund pension benefits. For Tier 6 members (those who joined NYSLRS on or after April 1, 2012), that percentage, or contribution rate, can change from year to year based on your earnings. The minimum rate is 3 percent of your earnings, and the maximum is 6 percent.

Overtime Pay Temporarily Excluded from Tier 6 Contribution Rates

The 2024–25 State budget included a new law which temporarily excludes overtime pay from the calculation of Tier 6 contribution rates. This may lower contribution rates for some Tier 6 members from April 1, 2024 through March 31, 2026.

For more information, read our blog post, Overtime Pay Temporarily Excluded from Tier 6 Contribution Rates.

Tier 6 contribution rates

When Tier 6 Contribution Rates are Determined

A Tier 6 member’s contribution rate is calculated annually. New rates become effective on April 1, the beginning of the state’s fiscal year. Once your rate is determined for a given fiscal year, it doesn’t change for the rest of that fiscal year. We provide rates to your employer in March, a few weeks before they need to apply any rate changes.

How Your Tier 6 Contribution Rate is Calculated

If you are a new NYSLRS member, during your first three years of membership your contribution rate is based on an estimated annual wage that your employer provided when you were enrolled as a new member.

If you have been a member for three or more years, NYSLRS calculates your rate using the earnings reported to us by your employer from the last completed fiscal year, April 1, 2022 through March 31, 2023.

Rates are calculated using your base pay, which includes:

This video will help explain how your contribution rate is determined:

How Your NYSLRS Pension Works

The amount you contribute to the Retirement System does not affect the amount of your pension. A NYSLRS pension is a defined-benefit plan. Under this type of plan, once you are eligible for a pension and apply for retirement, you will receive a monthly payment for the rest of your life. The amount of your pension will be calculated using a formula based on your retirement plan, years of service and final average earnings.

You can learn more about how your pension will be calculated by reading your retirement plan publication. Use our Find Your NYSLRS Retirement Plan Publication tool to find yours.

Supplement Your NYSLRS Pension with Retirement Savings

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Your NYSLRS pension can provide a significant portion of your retirement income, but it’s also a good idea to supplement your pension and Social Security with a retirement savings account.

Retirement savings can be an important financial asset when you retire. Savings can enhance your retirement lifestyle and give you the flexibility to do the things you want. Your savings can provide money for you to travel, continue your education, pursue a hobby or start a business. The money you set aside can also be a resource in case of an emergency, act as a hedge against inflation and boost your retirement confidence.

Set a Retirement Savings Goal

How much to save is a personal decision, but here are some things to consider.

Financial advisers often recommend saving 10 to 15 percent of your gross earnings throughout your career to retire comfortably. However, that advice is aimed at people with 401(k)-style defined contribution retirement plans as their main source of retirement income.

As a NYSLRS member, you’re part of a defined benefit plan, also known as a traditional pension plan. Your pension, based on your years of service and earnings, will provide a lifetime benefit. You can estimate your pension in Retirement Online to get an idea of the income it will provide in retirement.

Having a pension means you may not need to save as much as someone with only a 401(k). Use a retirement savings calculator to see how much a retirement savings plan could yield over time, or test the results of different savings amounts.

Below you can see potential savings results of someone who invests 50 dollars every two weeks over 30 years. While the stock market can be turbulent over the long term, stock market returns average about 10 percent a year.

Saving for Retirement

As you get closer to retirement, you should develop a plan to withdraw money from your retirement savings. A withdrawal plan will give you a better idea of the income you might expect from your nest egg.

Here is one possible withdrawal strategy, which was designed to provide retirement income for 20 years. Please note, if your retirement is far in the future, the money you withdraw may not have the same value that it has today. However, while inflation has been high recently, it does cycle and has been lower in the past.

Withdrawing from Retirement Savings

If you find you’ll need to save more to meet your goal, you can make adjustments to help ensure you’ll have enough savings in retirement.

Deferred Compensation – A Way to Save

State employees and many municipal employees are eligible to save for retirement through the New York State Deferred Compensation Plan. Once you’ve signed up, your retirement savings, which may be tax-deferred, depending on your plan, will be automatically deducted from your paycheck. (The Deferred Compensation Plan is not affiliated with NYSLRS.)

Check with your employer’s human resources or personnel office to see if they participate in the Deferred Compensation Plan or if they offer other savings options.

Read More About Retirement Savings

You can find more information about saving for retirement in these posts:

10 Things All NYSLRS Retirees Should Know

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Retirees, brush up on your Retirement System knowledge!

10 Things All NYSLRS Retirees Should Know
  1. Get Your 1099-R Tax Form in Retirement Online
    Starting in 2024, your 1099-R tax form will be available in Retirement Online! Get yours faster and help us ‘go green’ — update your delivery preference now to receive an email when it’s ready, instead of waiting for it in the mail. (If you choose to receive your 1099-R by email, you will not receive a printed copy in the mail. Regardless of your delivery preference, you will be able to view and print your 1099-R by signing in to Retirement Online at the end of January.)
  2. Change Your Federal Tax Withholding in Retirement Online
    Retirement Online is the fastest way to update your withholding. Changes submitted by the middle of the month will generally appear in that month’s payment. Most NYSLRS pensions are subject to federal income tax (some disability benefits are not taxable).
  3. Not Taxed by New York State
    Your NYSLRS pension is not subject to New York State or local income taxes. Visit our Taxes and Your Pension page for more information. If you move to another state, your pension may be subject to that state’s income tax. If you’re thinking of moving to another state, check with that state’s tax department.
  4. Get Your Retiree Annual Statement in Retirement Online
    Starting in 2024, you can use Retirement Online to view and print your annual statement. Help us go green and update your delivery preference to receive an email when it’s available, instead of waiting to receive it in the mail.
  5. Manage Your Direct Deposit in Retirement Online
    Use Retirement Online to securely update your direct deposit bank account information. Whether you’ve switched banks or need to move your deposits to a different account, you can make those changes quickly with Retirement Online. Changes are generally applied within one to two payments. You can find out when your next pension payment is coming by checking our online pension payment calendar.
  6. Prove Your Pension Income Using Retirement Online
    You may need proof of your retirement income for housing or as part of an application for the Home Energy Assistance Program (HEAP). With Retirement Online, you can print or save an income verification letter any time you need one.
  7. Receiving Your Annual Cost of Living Increases
    Once you become eligible for a cost-of-living adjustment (COLA), you will receive a permanent increase to your pension amount every September. When your net benefit amount changes, NYSLRS will inform you.
  8. View Your Pension Payment “Pay Stub” in Retirement Online
    Sign in to Retirement Online to access full pay stubs for your pension payments. Select the date of the payment you want to review to see a breakdown of your pension payment, including your most recent COLA amount as well as any deductions made for health insurance, union dues, tax withholding or disbursements under a domestic relations order.
  9. You May Leave a Death Benefit
    Your survivors may be entitled to a death benefit after you die. Retirement Online makes it easy for eligible retirees to view their beneficiary selections, choose different beneficiaries or change contact information for an existing beneficiary. Anyone can report the death of a retiree by using our online death report form.
  10. Best-Funded, Best-Managed
    The New York State Common Retirement Fund holds and invests the assets of NYSLRS on behalf of members, retirees and their beneficiaries and continues to be one of the best-funded and best-managed public pension funds in the nation. Comptroller Thomas P. DiNapoli is the administrative head of NYSLRS and trustee of the Common Retirement Fund.

Not retired yet? Read our blog post 10 Things All NYSLRS Members Should Know.

10 Things All NYSLRS Members Should Know

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Brush up on your Retirement System knowledge! Here are 10 things all NYSLRS members should know.

10 Things All NYSLRS Members Should Know
  1. Lifetime Retirement Benefit
    You are part of a defined benefit pension plan, which provides a lifetime benefit at retirement based on your earnings and years of service.
  2. Qualify for a Retirement Benefit by Becoming Vested
    Becoming vested is a key milestone in every NYSLRS member’s career. Once you’re vested, you have earned enough service to qualify for a retirement benefit, once you meet the minimum age requirements established by your retirement plan.
  3. Tier Determines Benefits
    Your tier determines your eligibility for benefits under your plan and how those benefits are calculated.
  4. Conduct NYSLRS Business Using Retirement Online
    Retirement Online is the fastest and most convenient way to do business with NYSLRS. It only takes a few minutes to open your account. Use Retirement Online instead of calling or mailing for instant access to benefit information and convenient tools to make account changes.
  5. Estimate Pension Using Retirement Online Calculator
    Most members can use Retirement Online to create benefit estimates based on the most up-to-date information we have on file. You can enter different retirement dates and payment options to see how those choices would affect your benefit.
  6. Use Plan Publication to Learn about Benefits
    Your retirement plan publication is a comprehensive source for information about your benefits.
  7. Pension Calculated Using Highest Earnings
    Your final average earnings (FAE) is another major factor in calculating your NYSLRS pension. When we calculate your pension, we find the set of consecutive years (one, three or five, depending on your tier and retirement plan) when your earnings were highest. 
  8. Request Past Service Credit Before Retirement
    Service credit is one of the major factors in calculating your NYSLRS pension. You earn a year of service credit for each year of full-time employment with a participating employer. In some cases, you may also be able to request additional credit for past service.
  9. NYSLRS Membership Includes Death and Disability Benefits
    NYSLRS membership provides more than just retirement benefits. If you become seriously ill or injured, you may be eligible for a disability benefit. And, you may also be eligible to leave a beneficiary a death benefit if you die while working for a public employer.
  10. Best-Funded, Best-Managed
    The New York State Common Retirement Fund holds and invests the assets of NYSLRS on behalf of members, retirees and their beneficiaries and continues to be one of the best-funded and best-managed public pension funds in the nation. Comptroller Thomas P. DiNapoli is the administrative head of NYSLRS and trustee of the Common Retirement Fund.

NYSLRS is one of the largest public retirement systems in America, serving more than 1.2 million members, retirees and beneficiaries. Read A Look Inside NYSLRS to learn more about your retirement system.

Vested: Qualifying for a Retirement Benefit

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Becoming vested is a crucial milestone for NYSLRS members. It means you have earned enough service to qualify for a retirement benefit once you meet the age or service requirements established by your retirement plan. Vesting is automatic — you don’t have to fill out any paperwork to become vested.

Vested: Qualifying for a Retirement Benefit

Years of Service Credit to Become Vested

NYSLRS members in Tiers 2 – 6 need five years of service credit to be vested.  

If you work part-time, or if you have an unpaid leave of absence, it will take longer to become vested. For example, if you work half-time, you earn six months of credit toward vesting for each year on the job.

Sign in to your Retirement Online account to check your total estimated service credit and whether you are vested.

If you work for a school district, read our How School Employees Earn NYSLRS Service Credit blog post for information about how your service credit is determined. 

Note: Previously, Tier 5 and 6 members needed ten years of service to be eligible for a service retirement benefit. However, as of April 9, 2022, these members only need five years of service credit to be vested. The new law did not change benefit rules such as how long members must contribute, pension benefit calculations, the full retirement age, reductions to retire early or the cost to purchase previous service.

Applying for Retirement

Vesting is automatic, but you will need to apply for retirement to receive your pension — NYSLRS will not pay out your pension benefit unless you apply for it.

Pension eligibility requirements and benefit calculations depend on your tier and retirement plan. To find your tier and retirement plan, sign in to your Retirement Online account and go to the ‘My Account Summary’ section. Once you know your tier and retirement plan, you can find your retirement plan publication for comprehensive information about your benefits and filing instructions.

And when you’re ready, you can apply for a service retirement benefit quickly and easily using Retirement Online.

If you leave public employment, read about the age requirements for filing for a vested retirement benefit as well as other important information that you should know about your NYSLRS membership and benefits.

A Look Inside NYSLRS

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The New York State and Local Retirement System (NYSLRS) administers two distinct systems. They are:

  • The Employees’ Retirement System (ERS) with 659,750 members; and
  • The Police and Fire Retirement System (PFRS) with 35,754 members.

During the State fiscal year that ended on March 31, NYSLRS provided pension benefits to nearly 515,000 retirees and beneficiaries. Altogether, that’s more than 1.2 million participants, making NYSLRS one of the largest public retirement systems in the nation.

A Look Inside NYSLRS

New York State Common Retirement Fund

NYSLRS benefits are provided by the New York State Common Retirement Fund. State Comptroller Thomas P. DiNapoli is administrative head of NYSLRS and trustee of the Fund, which is widely recognized as one of the best-managed and best-funded public retirement funds in the nation. It’s also exceptionally enduring; 2021 marked the 100-year anniversary of the Retirement System.

NYSLRS Members                                                          

But NYSLRS is more than just the pension fund. Here are some facts about NYSLRS members as of March 31:

  • 514,150 active members (that is, members still on the public payroll) work for 2,979 public employers statewide.
  • About one-third of those active members work for New York State. The rest work for counties, cities, towns, villages, school districts and public authorities.
  • Nearly 94 percent of total active members are in ERS. PFRS accounts for 6 percent of total active membership.
  • Almost 60 percent of all members are in Tier 6.
  • In ERS, 58.8 percent of members are in Tier 6, while 36.7 percent are in Tiers 3 and 4.
  • In PFRS, 51.1 percent of members are in Tier 6, while 43.4 percent are in Tier 2.

NYSLRS Retirees and Beneficiaries

The average pension for an ERS retiree was $27,227 as of March 31, 2023; the average for a PFRS retiree was $60,592. But these pension payments don’t just benefit retirees and beneficiaries. About 78 percent of retirees and beneficiaries stay in New York State and generate billions of dollars in economic activity. Their spending supports local businesses, contributes to local taxes and creates jobs in our communities.

Learn More About NYSLRS

Detailed information about our members and retirees, the Fund and Fund investments can be found in the 2023 Annual Comprehensive Financial Report.

Where Are Your Important Documents?

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We accumulate a lot of important documents over a lifetime — things such as birth certificates, diplomas, deeds, wills, insurance policies and more. If you’re like many people, you may have papers stuffed in drawers, filing cabinets or boxes in the attic. If you need an important document, will you be able to find it? What’s more, when you pass away, will your loved ones be able to find what they need?
where are your important documents?

Organize Your Important Documents

Important documents should be kept in a secure but accessible place in your home. This includes personal documents, such as your passport, birth certificate, marriage certificate, will and burial instructions. You should also include information about your NYSLRS retirement benefits, income taxes, bank accounts, credit cards and online accounts. Important contact information, such as the names and phone numbers of your attorney, accountant, stockbroker, financial planner, insurance agent and executor of your will should also kept in a secure location.

Our fillable form, Where My Assets Are, can help make organizing your important documents a little easier. It will help you or your loved ones locate these documents when they are needed. It’s a good idea to review and update this information regularly.

Be aware that a safe deposit box may be sealed when you die. Don’t keep burial instructions, power of attorney or your will in a safe deposit box, because these items may not be available until a probate judge orders the box to be opened. However, a joint lessee of the box, or someone authorized by you, would be permitted to open the box to examine and copy your burial instructions.

Review Death Benefits and Beneficiary Designations

Depending on your tier and retirement plan, your beneficiaries may be eligible to receive a death benefit. Visit our member and retiree death benefit pages for more information.

Then, sign in to your Retirement Online account to review your named beneficiaries and update their contact information if needed. From your Account Homepage, click “View and Update My Beneficiaries” to get started.

Please note, when a NYSLRS member or retiree dies, it is important that survivors report the death to NYSLRS as soon as possible. Before any death benefits can be processed or paid, NYSLRS will need an original, certified death certificate.

Crunching the Numbers: A Short Guide to Retirement Calculators

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A good estimate of your post-retirement income is essential for effective retirement planning. But gauging your income can be tricky when it comes from multiple sources. Fortunately, there are a variety of online calculators that can help you get started.

online calculators for retirement planning

NYSLRS Benefit Calculator

Most NYSLRS members can quickly create a pension estimate using Retirement Online. Your estimate will be based on the most up-to-date account information we have on file for you. You can enter different retirement dates to see how those choices would affect your benefit and adjust your earnings or service credit if you anticipate a raise or plan to purchase past service.

Social Security Calculators

The Social Security Administration (SSA) hosts several calculators that you may find helpful. Their Quick Calculator uses information you enter to provide a rough Social Security benefit estimate. Their Retirement Estimator calculates your benefit based on your actual earnings. You’ll need to enter your Social Security number and other personal information to create an SSA account. 

You can also look up when you will be eligible for full Social Security benefits and estimate your life expectancy.

Savings Calculators

If you are saving for retirement, a simple savings calculator can give you an idea of how your money can grow over the years. However, simple calculators like this assume a fixed amount of savings each month. Most people increase their retirement savings as their income grows.

If you have a 457(b) plan like those offered by the New York State Deferred Compensation Plan, you can use their interactive retirement planner to project a hypothetical view of what your retirement may look like based on information you provide

Savings Withdrawal Calculators

Savings withdrawal calculators are designed to help determine how much savings remains after a series of withdrawals. These are especially helpful tools to use when trying to determine how long your retirement savings will last, based on a starting amount, how much you expect to withdraw, how often and some other factors.

How Much Do You Need?

Now that you’ve estimated your potential sources of retirement income, it’s important to understand your anticipated expenses in retirement. Our Income and Expenses Worksheet can help you create a post-retirement budget.

Think of retirement security as a three-legged stool, with your NYSLRS pension, social security benefit and retirement savings working together to provide financial stability. Your NYSLRS pension is a defined benefit, or traditional pension, that will provide you with a monthly payment for the rest of your life. Having a retirement savings account can give you more flexibility to do the things you want to do, or provide a source of cash in case of an emergency. Start saving for retirement if you haven’t already, or give your retirement savings a boost.